I can't figure out how it would be possible that shifting from physical paper to online hosting could be more expensive
Developing and hosting something like JSTOR in the early to mid 90's was no where near as cheap and easy as it might be today (and let's face it even today it isn't completely trivial). Doubly so if you had no staff with the relevant skills and had to do everything via consultants.
Honestly, I don't know the whole story. I've only been around here for a few years.
Especially if you have no domain knowledge in running a paywalled website, you could end up getting charged an insane amount of money by some consultants to set it up for you.